Simulating a storage-production system with three oilseed crops

Abstract

This work developed a simulation model that is intended to be used for strategic investment decisions by a company that operates in a wide range of activities in the agriculture business in Brazil. Mostly, it is a tool that allows the user, in this case the company management, to quantitatively assess the results of their qualitative expectations for the business environment. I found that the supply of grains is potentially a higher uncertainty factor than demand, that different configurations of crushing capacity and storage impact the results with significant difference, depending on the demand and supply scenarios even in the near future. Knowing that uncertainty is unavoidable and largely impacts the business, I measured it and found that, yield uncertainty alone can impact profits dramatically. The model developed in this paper can easily be leveraged to include more sophisticated crushing rules and up to date market data. It can also be run timely and produce tailored reports.